Purchase Tax in Madhya Pradesh VAT Act

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Whether Purchase liable for Purchase tax if goods purchased deemed tax paid in the hands of Seller

Levy of Sale Tax u/s 9 on cotton specified in Schedule II (Entry no 27) @ 5% and such tax shall be levied on the taxable turnover of a selling dealer. Cotton is notified goods, (Noti. No. 19 dt. 3/8/09) procured for subsequently sale or consumption by purchasing dealer. Purchasing dealer issue TDS certificate u/s 26-A(1) to selling dealer after deducting VAT charged by selling dealer on invoice to discharge Sales Tax Liability of selling Registered Dealer. The turnover of sale of goods deemed Tax paid Rule 45-A(9) on producing TDS certificate received from purchasing dealer at the time of assessment of selling registered dealer. U/s 10 Every dealer who in the course of his business purchases any goods from a registered dealer in the circumstance in which no tax under section 9 is payable by the selling registered dealer on the sale price of such goods.

AI Summary

No Separate Purchase Tax on Cotton if TDS Deducted and Paid Under Sections 9 and 10 of MP VAT Act. A query was raised regarding the applicability of purchase tax under the Madhya Pradesh VAT Act when goods are deemed tax paid by the seller. The discussion focused on cotton, which is taxed at 5% under Schedule II. The purchasing dealer issues a TDS certificate to the selling dealer after deducting VAT, thus discharging the seller's tax liability. The response clarified that sales tax is covered by TDS payments made by the purchasing dealer. Consequently, no separate purchase tax is levied on goods where TDS has been deducted and paid, as per Sections 9 and 10 of the Act.